The National Living Wage is £7.20.

High street stores are allegedly selling clothes made by workers in Britain who are paid less than half the legal minimum, a Dispatches investigation has found.

Textile firms making garments for chains such as New Look, River Island, Boohoo and Missguided are paying the workers between £3 and £3.50 an hour to compete with foreign manufacturing where wages are low.

Dispatches, which airs tonight on Channel 4, secretly filmed one textile boss saying he considers he is in direct competition with Bangladeshi companies to meet the orders.

Safety concerns were also raised after a worker was caught on camera smoking on the factory floor, which one health and safety expert described as “an absolute disgrace”.

Channel 4Workers making jumpers for New Look at a factory in Leicester.

Undercover reporter Belal got a job in Fashion Square Ltd and was put to work sticking bar codes and River Island labels on clothes.

After two days working in the factory, Belal had not been informed how much he was going to get paid or when, Dispatches reports.

After Belal told his boss that he would normally get paid at least £7.20, his employer replied: “You won’t get that here. That’s what I’m telling you.

“We don’t get paid much for our clothes, and we need to compete with China and Bangladesh.

“They can get it cheap there. How will they get it made cheaper here? If we pay everyone £10 or £6 then we will make a loss.”

Belal earned £110 for a week’s work for packing and pressing River Island dresses. That works out as £3 an hour, £4.20 below the National Living Wage, the legal minimum for over-25s in Britain.

Fashion Square Ltd denied to Dispatches that anyone at the factory was paid below the legal wage.

River Island told Dispatches they have removed Fashion Square Ltd from their Approved Factory List.

River Island added: “Suppliers were informed not to use this factory for any further... orders… sub-contracting without River Island’s approval is a serious breach of our terms and conditions.”

Channel 4River Island said supplied had been informed not to use the factory for any further orders.

The undercover reporter later started working at a factor that produces jumpers destined for New Look.

Dispatches claims that the man who hired Belal did not check that he had the necessary documents to work legally in the UK.

Belal helped to produce yellow jumpers which retail at £19.99. He was paid £3.50 an hour - less than half the legal minimum wage.

Although the reporter is not told the name of the factory he is working for, he finds documents from New Look about the jumpers, Dispatches reports.

The order form was from New Look and was addressed to a company called TS Knitwear (UK) Ltd.

Channel 4The New Look jumper, which retails at £19.99.

A New Look spokesperson said in a statement: “New Look is committed to respecting and improving the lives of workers right across our global business and supply chains, so we are extremely concerned by the outcome of this investigation.

“We have worked hard over the past few years to address potential weaknesses in our supply chain. As a result we have reduced the number of UK suppliers we work with by 80% since 2011. This news is therefore a disappointing and saddening setback for us.

“Following an audit we conducted last summer, we made it clear to the supplier, TS Knitwear, that the factory in question did not meet our required ethical standards and therefore should not be used to manufacture New Look garments.

“Since then, it has become clear that TS Knitwear has subcontracted a small number of orders to this factory without our knowledge or consent and in breach of our agreement.

“As a result, we have terminated our relationship with TS Knitwear with immediate effect. We will be working closely with the business to support all its workers who will be affected by this.”

TS Knitwear said it has “clear ethical guidelines” and that due to “an unusually large volume” of orders they outsourced some production.

They were “dismayed” to learn about Channel 4’s investigation and said that as “it is very difficult to police outsourced work” they will now only manufacture in-house.

Channel 4Concerns were raised after a worker was filmed smoking in the textile factory.

While working undercover at United Creations Ltd, which makes clothes for Boohoo and Missguided, Belal was paid £3.25 per hour for his work, Dispatches reports.

While there, he packaged a Boohoo jacket and mark up zips on dresses for Missguided.

Belal also raised fire safety concerns at United Creations Ltd after witnessing rubbish piled on the factory floor and the fire exists blocked.

Professor Richard Booth, a health and safety expert, watched the footage provided by Channel 4 and said he had concerns what would happen in the event of a fire.

“What people don’t appreciate is that fires happen very, very rapidly, there’s a smoke build up, there’s a low ceiling, the people are partly panicking and the doors open the wrong way anyway,” said Booth.

But it was a worker smoking on the factor floor that startled him most.

“That was the most remarkable sight on the video, I mean an absolute disgrace and he was walking around dropping ash in the main area where all the fabrics were being retained,” he said.

United Creations Ltd denied to Dispatches that anyone at the factory was paid below the legal wage and said that an independent Fire Risk Assessment was carried out at the factory in June last year.

Boohoo said they were “unaware that United Creations was carrying out work [for an approved supplier] [and] that [they] “visited United Creations as soon as Dispatches alerted us.. to assist them in... [raising]... the standard of their safety procedures and ensuring that they pay at least the minimum wage.”

The company added that it has a “demanding set of.. policies [for] all suppliers” and will undertake regular unannounced audits.

Missguided said: “We take the allegations... very seriously and demand the highest standards of safety, working conditions and pay from all of our suppliers and subcontractors.

“We are committed to achieving the standards set by the Ethical Trading Initiative and conduct regular audits and spot-checks of our supply chain.

“We have begun an internal investigation … we will also ensure these matters are addressed urgently by the supplier in the best interests of the workers.”